No idea about tax benefits of the accounts, or maximum contributions

According to a new survey by TIAA-CREF, less than one in five Americans are contributing to an individual retirement account — and most of those who do are not putting in the maximum allowed. About 38% of the respondents with an IRA contribute the top amount allowed under the law.

Baby boomers are the most likely to make the maximum contribution, about 52% of this set, while 41% of women with an IRA contribute the most allowed, the survey found.

The numbers get demonstrably worse the farther down the age chain you go. Indeed, about three out of four young adults (18 to 34) didn't even know there is a maximum amount people can contribute, according to the survey. More than half of these younger Americans didn't know IRA contributions grow on a tax deferred basis.

“Financial literacy among younger Americans needs improvement,” said Dan Keady, a certified financial planner and director of financial planning for TIAA-CREF, which used knowledge about IRAs as a benchmark for judging financial literacy.

He noted that it's important to work with younger Americans because small contributions can have such a large impact on financial security when the investment horizon is long. His research shows that saving among young adults improves when they are shown the benefits.

“When we engage with younger individuals and they see the benefits of compounding and tax advantages, they tend to contribute more to their retirement plans and other accounts," he said.

Still, more than 62% of the respondents said they didn't know about certain IRA features, such as the guidelines for Roth IRAs. They also weren't aware of “catch-up” provisions that allow people over the age of 50 to contribute an additional $1,000 beyond the $5,000-a-year maximum.